Money
Tax on Gambling Winnings
It may come as a surprise, but when you win enough money to the point that your life changes, that is when taxes come into play.
On this page · 3 sections
Most people only think of winning the lottery, but the true surprise comes to anyone with enough money from casinos, Just here in the Philippines, any gambling winnings of over ₱10,000 is subject to 20% tax, with the most recent clarification the Bureau of Internal Revenue issued hammering home that rule change.
The rules on taxing gambling winnings are a bit more nuanced than you might expect, so don't expect a quick rundown. Let's dive into the details.
Tax Rules for Philippine Charity Sweepstakes Office & Lotto Prizes
Under Section 24(B)(1) of the Philippine Tax Code, as amended by the TRAIN law, prizes and other winnings derived from within the Philippines are subject to a 20% final tax.
- Philippine Charity Sweepstakes and Lotto winnings amounting to ₱10,000 or less, which are also fully exempt.
The 2026 Update on Taxing Games Of Chance
In May 2026, the Bureau of Internal Revenue issued a clarification that brought all jackpot prizes and winnings, not just those from PCSO or lotto, under their definition of "winnings" and subject to the 20% tax.
Most notably, this clarification applies to:
- Jackpot prizes or similar winnings from casino gaming
- Winnings from other gambling activities, both licensed and unlicensed
Resident Filipinos paying 20%, with non-resident aliens facing a slightly higher 25% tax rate. The details can be found in RMC 57-2026.
How Gambling Tax is Computed
The tax base for these winnings is the gross amount of the prize or payout, with no deductions allowed for service charges, fees, commissions, or other costs.
To illustrate, let's say you hit a jackpot of ₱50,000 at a Philippine casino:
- The gross winnings amount is taken as the tax base
- A 20% final tax is withheld at source
- The tax amount would be 20% of ₱50,000 = ₱10,000
- Your net payout after tax would be ₱50,000 - ₱10,000 = ₱40,000
For non-resident aliens, the withholding tax would be 25% of the winnings, or in this case, ₱12,500, with a net payout of ₱37,500.
Obligations of Gambling Operators
Gambling operators, both licensed and unlicensed, are obligated to withhold the applicable final tax on winnings at the time of payout. This withholding is considered a final payment, and winners are not required to report this income in their annual income tax return.
The BIR has stated that operators who fail to withhold and remit the tax may face surcharges, interest, compromise penalties, and even criminal charges. So, operators have a strong incentive to comply with these rules.
Higher Tax Rates Proposed, But Not Yet Enacted
However, at this stage, it is still a bill and not yet enacted into law. The rates we've discussed above remain the current, applicable rates.
Philippine gamblers should be aware that, just like elsewhere, tax officers closely monitor the flow of money. In the event of a win, know what to expect from the government.
